Humber/Ontario Real Estate Course 4 Exam Practice

Which of these scenarios best describes a condition subsequent in a buyer’s offer?

1. Allows seller the certainty that condition cannot be waived

2. Must be redrafted from true condition precedent

3. An offer binding with termination conditions

4. Should be written for mortgagee approval

5. Where both parties must fulfill the conditions

6. When the seller can waive the condition alone

The correct answer is: An offer binding with termination conditions

A condition subsequent refers to a specific condition in a contract that, if it occurs, may terminate the contract or a party’s obligations under the contract. In the context of a buyer’s offer, the correct scenario illustrates an offer that is binding but includes conditions under which it may be terminated. This signifies that once an agreement is in place, certain events or actions could lead to the end of that agreement. The binding nature of the offer implies that the buyer has made a commitment, yet the presence of termination conditions means there are specific criteria that can be triggered, allowing one or both parties to exit the contract if those conditions are not satisfied or come to fruition. This contrasts with other types of conditions, such as conditions precedent, which must be fulfilled for the contract to be enforceable from the outset. Therefore, understanding that a condition subsequent provides a framework within which the contract remains valid and binding until a specified condition occurs is crucial in recognizing the nature of the offer in question.